Gomery Commission of Inquiry & Sponsorship Scandal

In February 2006, the Commission of Inquiry into the Sponsorship Program and Advertising Activities (better known as the Gomery Commission) released the second of two reports. This final report provided recommendations for reform to ensure that incidents such as the Sponsorship Scandal do not happen again. The first report, released in November 2005, detailed the Commission’s key findings concerning the actual events pertaining to the scandal. This article provides an introduction to the Sponsorship Program and the scandal that developed around it, as well as an overview of the nature and findings of the Gomery Commission of Inquiry.

Commission’s recommendations for governmental reform

Find out more about the Gomery Commission and the Sponsorship Scandal

What was the Sponsorship Program?

The Gomery Commission was tasked with investigating allegations of the misuse of public funds through what came to be known as the Sponsorship Program. What exactly was the Sponsorship Program?

Government Advertisement & Publicity

The Sponsorship Program was a federal government advertising campaign. One might think that advertising and publicity are activities undertaken only by businesses in the private sector. This, however, is not the case. Each year federal, provincial, territorial, and municipal governments in Canada spend hundreds of millions of dollars on various forms of advertising and publicity.

You have probably seen many examples of this government marketing. On television there are government ads telling you about a new service being offered or an important public event. On highways there are signs informing you which level of government contributed to a road improvement. At a sporting event, there are often signs and billboards bearing government logos. These are all examples of government advertising and publicity.

A government engages in these advertising activities for many reasons. It may want to inform the public about a new policy or program that is being undertaken, or about changes to a previous program. It may also want to curb certain social behavior through public awareness campaigns, such as smoking or drinking and driving. In some cases, such as the Sponsorship Program, the government may simply wish to raise its profile among members of the public.

Federal Sponsorships & Quebec Sovereignty

The Sponsorship Program was a specific sort of advertising campaign: its purpose was to promote national unity and the profile of the federal government, particularly, in the province of Quebec. Some background information is important here.

Quebec Referendum of 1995

Shortly after the Liberal Party came to power in 1993, helmed by Jean Chrétien, the issue of Quebec sovereignty became a national focus. In 1994, the Parti Québécois, led by Jacques Parizeau, came to power in Quebec; not long after, the new provincial government announced it would hold a provincial referendum on the question of Quebec sovereignty, and whether or not Quebec should separate from Canada. Sovereigntists and federalists began to organize themselves for the referendum campaign, raising money and hiring strategists and workers.

While the federal Liberal government did not lead the referendum campaign against separation, it did play an active role. The federal government contributed millions of dollars for public opinion research and various form of advertising promoting Canadian federalism. While not yet organized into a formal advertising program, these were the beginnings of what would later become known as the Sponsorship Program.

Ultimately, Quebec sovereignty was narrowly defeated in the 1995 Referendum (50.4 percent voted against sovereignty, while 49.4 percent voted in favour). Immediately following the loss, Mr. Parizeau resigned as Premier of Quebec and leader of the Parti Québécois. Shortly thereafter Lucien Bouchard, formerly the leader of the federal Bloc Québécois, replaced him. Upon becoming Premier, Bouchard pledged to call another referendum on Quebec sovereignty at any time in the future, whenever he felt the “winning conditions” might be present.

Advertising Policy Post-Referendum

After the near loss of the country in the ’95 Referendum, the federal Liberal government took Premier Bouchard’s pledge seriously. It established a Cabinet committee under Marcel Massé, then Minister of Intergovernmental Affairs; its purpose was to make recommendations on strategies for national unity and how the federal government might increase support for Canadian federalism in Quebec.

Massé submitted his committee report (the Massé Report) in 1996. At the Gomery Commission nine years later, Massé testified that, among many other things, he had come to the conclusion that the federal government had failed to properly communicate the federalist message during the 1995 referendum campaign. To correct this problem, his Report made several recommendations:

Create a new agency dedicated to the development and implementation of communication strategies and tactics for the federal government; and

Develop a coordinated effort on the part of the federal government to increase its visibility and Canada’s presence in Quebec.

A third recommendation, one that was highlighted by the Gomery Commission during its proceedings, was the need to strengthen the organization of the Liberal Party of Canada in Quebec. During the mid-1990s, the Liberal Party was the only pro-federalist political party with any real support in the province. The Report concluded that a strong Liberal Party of Canada in Quebec was necessary to combat the strength of the sovereigntist message carried by both the federal Bloc Québécois and the provincial Parti Québécois. According to the Gomery Commission, reinforcing the Liberal Party in Quebec included the hiring of party organizers, finding strong candidates to run in elections, and identifying ‘winnable’ ridings.

The Massé Report was discussed in detail at a Cabinet retreat in February 1996; this retreat would have included ministers and high-ranking government officials, among them, then Prime Minister Chrétien and Finance Minister Paul Martin. At the Gomery Commission proceedings, witnesses testified that while no specific references to a Sponsorship Program were made, there was general agreement that the federal government needed to raise Canada’s profile in Quebec. Furthermore, it was ultimately left to the Prime Minister’s Office, which assumed primary responsibility for national unity concerns, to determine exactly how these initiatives would be implemented and financed.

Creation & Oversight of the Sponsorship Program

Sponsorships & the Canada Information Office

The federal government acted quickly on the recommendations in the Massé Report; in July 1996 it created a new communications agency, the Canada Information Office (CIO). The CIO was given the mandate of coordinating the federal government’s communications concerning national unity, and enhancing the presence of the federal government across the country, in particular, in Quebec.

Not long after it was established, the CIO announced it would offer government sponsorships for community and cultural events and projects. These sponsorships were non-repayable cash grants given to event and project organizers. In exchange for the sponsorships, the federal government was entitled to advertise its participation at these events. For example, when the government sponsored a community function, it would be entitled to post signs with the federal government’s logo at the event locale.

While the CIO was technically placed under the purview of the Ministry of Canadian Heritage, testimony at the Gomery Commission revealed that the Prime Minister’s Office played a large role in the agency’s creation and initial operation. Prime Minister Chrétien interviewed the director of the new agency prior to his hiring, and the director reported, not to the Minister of Canadian Heritage, but directly to the Prime Minister’s Chief of Staff, Jean Pelletier. Furthermore, funding for the new agency was drawn from the Unity Reserve, a pool of funding set aside for the Prime Minister to use for initiatives relating to national unity. The Conservative government under Prime Minister Brian Mulroney had created the Unity Reserve; it was kept active by the Liberals following their election to office in 1993.

Sponsorships & APORS

The CIO’s administration of the Sponsorship Program, however, was shortlived. At the Gomery Commission, the CIO director testified that his agency lacked the adequate personnel and expertise to properly administer the Sponsorship Program. In subsequent meetings between the CIO director and Mr. Pelletier, the Prime Minister’s Chief of Staff, it was agreed that the administration of sponsorships was to be transferred to a different government agency, the Advertising and Public Research Sector (APORS), and its director, Charles Guité. APORS was a federal agency responsible for managing federal government advertising activities. Accordingly, Guité took over day-to-day operations of the Sponsorship Program; he would later be identified as a central figure in the Sponsorship Scandal.

In 1997, APORS was merged into the new Communications & Coordination Services Branch (CCSB), under the Ministry of Public Works and Government Services Canada (PWGSC). Mr. Guité was appointed director of CCSB and continued to run the day-to-day operation of the Sponsorship Program. Also in 1997, Alfonso Gagliano was appointed Minister of PWGSC; over time, he gradually assumed supervision of the Sponsorship Program from Jean Pelletier and the Prime Minister’s Office. Gagliano was eventually shuffled out of the federal cabinet in 2002, following allegations of conflict of interest in the management of the Sponsorship Program.

Mr. Guité retired from the federal government in 1999 and was replaced as head of the CCSB and director of the Sponsorship Program by Pierre Tremblay, formerly Mr. Gagliano’s Executive Assistant. In 2001, CCSB was merged, along with the Canada Information Office (CIO) into a new organization, Communications Canada, which assumed overall responsibility for the Sponsorship Program.

Sponsorships & Advertising Firms

Under Mr. Guité and the Advertising and Public Research Sector, sponsorships were administered through private advertising firms, some of which have been at the heart of the Sponsorship Scandal. Understanding the tender process for these contracts is key to understanding the very nature of the Sponsorship Scandal.

Advertising Firms & Government Advertising

The federal government does not produce its own advertising campaigns; instead, it contracts out this work to private advertising firms. For example, consider a new policy that the federal government wants to publicize to Canadian citizens. The Government of Canada will announce, through a public tendering process, that it is interested in hiring a private advertising firm to create and produce said campaign. Firms will submit bids to the government in which they will outline their ideas for the campaign, projected costs, and the time required to complete the work. The government will then pick the most competitive bid, hiring the associated firm to produce the campaign.

The federal government usually has procedures and criteria governing the bid and selection process. It is generally the case that all interested firms must be given full opportunity to submit a bid on a government contract. In selecting the winning bid, the government is supposed to take into account such factors as price and overall value. Moreover, a review of the firm’s performance is generally part of the contracting process; this ensures the government is getting the services and products for which it is paying.

Contracting-Out of Sponsorships

Under the Sponsorship Program, community event and project organizers, or advertising firms representing them, would submit requests for government sponsorships to the Advertising and Public Research Sector (and, later, the Communications & Coordination Services Branch). Mr. Guité, as director of APORS and the Sponsorship Program, would subsequently identify which events the Government of Canada should sponsor and how much money should be allocated for each. He would then select a private advertising firm to actually manage the government sponsorship.

In managing the government sponsorship, the advertising firm would be provided with a lump sum of money. From this lump sum the firm would pay the actual sponsorship to the community event or project, as well as arrange for the federal government’s advertising campaign. In some cases, the firm would provide the advertisement itself. It would produce the advertisement, in-house, and then bill itself for producing the campaign. In other cases, the advertising firm would sub-contract out parts, or all, of the advertising work to another company.

The lead advertising firm usually would take a “commission” for managing the sponsorship. This was a separate payment and was in addition to whatever the firm billed for doing the actual advertising work. In many cases, these additional commissions represented substantial portions of the overall lump sum of money the Advertising and Public Research Sector provided to the firm for the sponsorship.

This contracting-out process was central to the Sponsorship Scandal; both the Auditor General’s 2003 Report and the Gomery Commission proceedings found a blatant disregard for the normal rules governing the bidding and selection process. There were also allegations that Mr. Guité and the Advertising and Public Research Sector (later, the Communications & Coordination Services Branch) failed to properly oversee the private firms to ensure that all contractual obligations were being met.

Termination of the Sponsorship Program

In early 2000, the Liberal government began to come under heavy criticism for its management of the Sponsorship Program. This resulted in a government review of the program, as well as several attempts to make the sponsorship process more transparent and accountable. In 2002, the Auditor General of Canada was asked by the Chrétien government to review several sponsorship contracts managed by the private advertising firm known as Groupaction. Ultimately, this led to a review by the Auditor General of the Sponsorship Program as a whole, which revealed severe government mismanagement of the sponsorships.

Another factor came into play in this story: in late 2003, Paul Martin replaced Mr. Chrétien as leader of the Liberal Party and Prime Minister of Canada. One of Martin’s first actions as Prime Minister was to terminate the Sponsorship Program and wind down the Communications & Coordination Services Branch, the government agency responsible for administering sponsorships.

Origins of the Sponsorship Scandal

From allegations of conflict of interest to the creation of the Gomery Commission

Minister Gagliano & Allegations of Conflict of Interest

The Sponsorship Scandal began with allegations of conflict of interest in the management of federal sponsorships. In 2000, Alfonso Gagliano, then Minister of Public Works and Government Services Canada (PWGSC), and also the minister responsible for the Sponsorship Program, came under fire when it was revealed that sponsorship contracts had been awarded to advertising firms that had sub-contracted their printing business to a company linked to Gagliano’s son. Opposition parties called for Gagliano’s resignation, suggesting that it was inappropriate for a cabinet minister to be overseeing government contracts that benefited his family.

The Federal Ethics Counsellor, Howard Wilson, later cleared Gagliano of breaking any conflict of interest rules. However, in January 2002, Prime Minister Chrétien shuffled Gagliano out of the federal cabinet and appointed him ambassador to Denmark. Prime Minister Paul Martin later revoked Gagliano’s ambassadorship in 2004 following the release of the Auditor General’s Report on the Sponsorship Program.

Groupaction & Sponsorship Irregularities

Concerns with the Sponsorship Program later intensified over irregularities found in sponsorship contracts given to Groupaction Marketing, Inc., a Montreal-based advertising firm. In the late 1990s, Groupaction had been awarded three contracts for advertising-related services designed to increase the visibility of the federal government. The contracts were valued at $500,000, $550,000, and $575,000 respectively.

In March 2002, Public Works and Government Services Canada (PWGSC) reported that one of the Groupaction reports, worth $550,000, had not been delivered. The report was to have suggested ways in which the federal government could improve its visibility at cultural and sporting events. When the report was later discovered, it was nearly identical to another study already delivered by Groupaction. Both documents, in fact, had been found to discuss the same subjects, even containing the same spelling errors.

Don Boudria, then Public Works Minister, immediately asked the Auditor General of Canada to investigate the three Groupaction contracts totaling $1.6 million. In May 2002, then Auditor General, Sheila Fraser, released her Groupaction Report, revealing severe shortcomings at all stages of the contract management process, as well as a failure on the part of Groupaction to fulfill the services for which it was contracted and paid to perform.

The Auditor General referred the Groupaction matter to the Royal Canadian Mounted Police (RCMP) for further investigation. In September 2002, the RCMP raided the Montreal offices of Groupaction in a search for evidence relating to their sponsorship contracts. In May 2004, the RCMP charged Groupaction President Jean Brault with six fraud-related charges. Brault pled not guilty and was released on bail.

Widening of the Sponsorship Scandal

In addition to referring the Groupaction matter to the RCMP, the Auditor General announced that her office would undertake a government-wide audit of all advertising and sponsorship activities since 1997. In her report, released in February 2004, the Auditor General found a persistent pattern of mismanagement in government sponsorship contracts that had cost Canadian taxpayers millions of dollars.

The Auditor General found that the Sponsorship Program had been administered with complete disregard for federal contracting rules and procedures. It is standard practice, for example, that government contracts must undergo a selection process in which private companies competitively bid against one another for the contract. The government then awards the work to the company that makes the most competitive bid. In the case of sponsorships, however, the Auditor General found that contracts were often given to particular advertising firms without holding full and open bidding competitions.

The Auditor General also found that the Government of Canada was not getting fair value for its money. Between 1997 and 2003, the federal government had paid over $100 million in sponsorship-related fees and commissions to private advertising firms. The Auditor General concluded that, in many cases, the government had received little or no services in return for these payments.

Creation of the Gomery Commission

In December 2003, Prime Minister Jean Chrétien retired and was replaced by Paul Martin, the former Minister of Finance. On his first day in office, the new Prime Minister announced the cancellation of the Sponsorship Program.

Following the release of the Auditor General’s Report in early 2004, Prime Minister Martin maintained he knew nothing of the Sponsorship Program or the government mismanagement while he was Minister of Finance. Martin further committed to a broad and full investigation, and, in February 2004, created a Commission of Inquiry (the Gomery Commission) to investigate the Sponsorship Scandal.

Background on the Gomery Commission

Commission goals, personnel, and proceedings

What is a Public Inquiry?

A public inquiry is an official review, ordered by government, of important public events or issues. The purpose of a public inquiry is to establish the facts and causes of an event or issue, and then to make recommendations to the government. All levels of government (federal, provincial, and territorial) have the power to call public inquiries. A public inquiry is not the same as a court trial or a police investigation.

Mandate of the Gomery Commission

The Gomery Commission was mandated by two broad objectives. The first was to determine what exactly happened to bring about the Sponsorship Scandal and who was involved. The Commission’s findings on this subject were offered in Who is Responsible?, the first report released in 2005. The Commission's investigation addressed some specific questions:

What was the purpose of the Sponsorship Program, and how was it created and operated?

What were the roles and responsibilities of elected and non-elected officials in the creation and operation of the Sponsorship Program?

Was Parliament bypassed, and were government rules and procedures broken, in the operation of the Sponsorship Program? If so, by whom?

Was there political influence involved in the operation of the Sponsorship Program? If so, by whom, to what purpose, and to what effect?

Did any person or organization in the Government of Canada gain an advantage financially, politically, or otherwise from the operation of the Sponsorship Program? If so, to what effect?

Were there sufficient procedures and controls in place to adequately regulate government sponsorship and advertising activities?

The Gomery Commission's second objective was to provide the federal government with recommendations to prevent similar wrongdoings from happening again. The Commission’s goal here was not simply to highlight “what went wrong,” but to provide possible reforms and initiatives the government could adopt to prevent similar problems from occurring again in the future. The Commission provided these recommendations in Restoring Accountability, the Commission's second report released on February 1, 2006. Specific issues addressed by the Commission included:

The adequacy of existing structures pertaining to responsibility and accountability for ministerial staff members and public servants;

The strength of federal policies and procedures to encourage and protect ‘whistleblowers’ (persons that report misconduct or misdoings);

The strength of federal Access to Information legislation and procedures; and

Limits on the Gomery Commission

There were several important limits placed on the Commission of Inquiry:

The Gomery Commission was authorized only to investigate sponsorship and advertising activities considered by the Auditor General’s 2003 Report on the Sponsorship Program. Advertising activities outside of the Sponsorship Program and the Auditor General’s Report were beyond the purview of the Commission.

As it was only a public inquiry and not a court trial, the Gomery Commission could not express any conclusions regarding the civil or criminal liability of any person or organization it investigated. It was limited only to assessments of the evidence and findings of fact. The Commission could, however, forward its conclusions to police agencies for further investigation and possible criminal charges.

Any recommendations given by the Gomery Commission for reforming government advertising activities were considered to be non-binding. In this, it was understood that the federal government was under no legal obligation to adopt any of the recommendation made by the Commission, and indeed, could choose to reject the Commission’s conclusions altogether, if so desired.

Within these limits, however, the Gomery Commission was given complete independence. The Commission was free to call any witness and examine any evidence that it believed to be relevant to the creation and operation of the Sponsorship Program. The Commission was also free to draw its own conclusions about what happened with the Sponsorship Program and what reforms needed to be put into place.

Commissioner John Gomery

The Commissioner, a central figure in any public inquiry, serves as its director and leads its day-to-day activities. S/he also plays a central role in forming the conclusions and recommendations provided in the inquiry’s final report. Commissioners are often politicians held in high esteem or, as in the case of the Gomery Commission, a judge in the Canadian judiciary.

Justice John Gomery helmed the Commission of Inquiry. Mr. Gomery was born in 1932 in Montreal, Quebec, where he attended elementary school, high school, and university. He earned a Bachelor of Arts degree from McGill University in 1953, and a law degree from the same institution in 1956. Mr. Gomery was admitted to the Quebec bar in 1957, and joined the law firm of Fasken, Martineau, DuMoulin, where he practiced in the fields of family law, commercial litigation, and bankruptcy.

In 1982, Mr. Gomery was appointed to the Quebec Superior Court for the District of Montreal. From 1983-93, he served as president of the Comité Général des Juges de la Cour supérieure du Québec, and president of the Family Law Committee. In 1999, he was appointed chairperson of the Copyright Board of Canada, a government regulatory agency responsible for overseeing the operation of copyrights in Canada. Mr. Gomery was re-appointed to the position in 2003, but resigned the post upon becoming Commissioner of Inquiry.

Gomery is married to Pierrette Rayle, judge of the Quebec Court of Appeal, and together they have four children.

Proceedings of the Commission

Phase I of the Gomery Commission

In the first phase of its report, the Commission was tasked with determining what events occurred to cause the Sponsorship Scandal. In performing this task, the Gomery Commission operated in a very court-like fashion. Witnesses were called to give testimony and provide evidence. They were examined and cross-examined by lawyers representing the Commission, as well as legal counsel from other parties with an interest in their testimony. Commissioner Gomery’s role in the day-to-day activities of the Inquiry was limited mainly to making procedural rulings; for example, whether a particular question asked of a witness was within the Commission’s purview. Only on rare occasions did he actually question witnesses himself.

In September 2004, the Commission heard its first witness, Sheila Fraser, the Auditor General of Canada. Her 2003 Report on the Sponsorship Program had revealed the patterns of government mismanagement in sponsorships and had spawned the Gomery Commission itself. Other notable witnesses included former Prime Minister Jean Chrétien, Prime Minister Paul Martin, high-level ministers and public servants, executives of the advertising agencies involved in sponsorships, and members of the Liberal Party of Canada in Quebec. In total, the Commission examined more than 100 individuals and groups over a period of almost a year. It submitted its findings on these particular aspects of the inquiry in its initial report, published in November 2005.

Phase II of the Gomery Commission

In the second phase of its report, the Commission provided recommendations for ensuring that similar problems would not happen again in government advertising activities. In performing this task, the Commission shed its court-like mode in favour of a more academic format. The Commission formed an Advisory Committee composed of prominent Canadians with broad experience in public policy to guide its research program and identify key issues for review. The Advisory Committee held roundtable discussions across Canada with leading experts and persons experienced in government administration at various levels. The Commission also received written submissions from groups, interested individuals, and government departments and agencies. A special website was set up in order to allow Canadians to make comments and suggestions on government reform.

For more information on the Advisory Committee, its research and consultations:

In developing the Commission’s recommendations outlined in its report, the Commissioner and his staff drew on many theses studies, views, and opinions. The consultation, research, and writing process took less than a year and, in February 2006, the Commission submitted its recommendations to the federal government.

Key Commission Witnesses & Testimony

Who said what at the Gomery Commission?

The first phase of the Commission’s work focused on what happened in the Sponsorship Scandal and who was involved. During the course of its investigation, the Commission heard testimony from over 100 individuals and groups. The following provides a summary of some of the key witnesses and their testimonies:.

For the full texts of the testimony provided by the following witnesses:

Jean Brault: Advertising Executive, Groupaction Marketing

Jean Brault was the head of Groupaction Marketing, an advertising firm based in Montreal, Quebec. Groupaction had received millions of dollars in sponsorship contracts from the federal government during the 1990s, and had been the focus of an Auditor General’s investigation in 2002.

In the most explosive testimony at the Gomery Commission, Mr. Brault testified that he participated in several schemes to defraud the federal government and funnel money to the Quebec-wing of the Liberal Party of Canada. Under these schemes, Groupaction received preferential treatment in obtaining sponsorship contracts and was allowed to submit false invoices to the federal government for services it never rendered. In return, Mr. Brault provided money and support to the activities of the Liberal Party in Quebec. Mr. Brault testified that, in one scheme, he agreed to provide Jacques Corriveau, a Liberal Party organizer in Quebec and friend of Prime Minister Jean Chrétien, with a percentage of the commissions that Groupaction received from sponsorship contracts. Mr. Brault also testified that he repeatedly arranged large cash donations to the Liberal Party, in addition to placing Liberal election workers on his payroll, even though they were working exclusively on Party business.

Jacques Corriveau: Liberal Party Organizer in Quebec

Jacques Corriveau was a close associate of Prime Minister Jean Chrétien and owner of Pluridesign Canada Inc., a billboard and poster manufacturer based in Quebec. Mr. Corriveau was a key member of Prime Minister Chrétien’s 1984 and 1990 Liberal leadership campaign teams, and produced advertisements for Liberal Party candidates in Quebec during the 1993, 1997, and 2000 federal elections.

Mr. Corriveau had been implicated in the Sponsorship Scandal by the earlier testimony of Jean Brault, head of the Groupaction advertising firm in Quebec. Mr. Brault had testified that he had entered into a kickback scheme with Mr. Corriveau. Under this scheme, Groupaction would receive preferential treatment in obtaining government sponsorships in exchange for funneling monies to the Quebec-wing of the Liberal Party of Canada through Mr. Corriveau.

In his testimony at the Gomery Commission, Mr. Corriveau denied the allegations, stating that he never diverted sponsorship money to the Liberal Party. He also testified that he never discussed sponsorships with then Prime Minister Jean Chrétien. Mr. Corriveau, however, did reveal that he knew about the Sponsorship Program and that he had lobbied Charles Guité, the director of the Program, on behalf Luc Lemay, a hunting and fishing show promoter. Mr. Lemay testified at the Gomery Commission that his companies had received $36 million in federal sponsorships, and that he had paid Mr. Corriveau a sum of $6.7 million in commissions for his help in securing the sponsorships.

Charles Guité: Director of the Sponsorship Program

Charles Guité was the senior public servant who oversaw the day-to-day operation of the Sponsorship Program, first as director of the Advertising and Public Research Sector (APORS), and then as director of the Communications & Coordination Services Branch (CCSB). As the manager of the Sponsorship Program, Mr. Guité was of great interest to the Gomery Commission and its investigation into government wrongdoing.

See the What was the Sponsorship Program? section of this article for more information on how the Sponsorship Program was created and operated.

At the Gomery Commission, Mr. Guité testified that he was not completely responsible for the Sponsorship Scandal, and that he was often acting on the bequest of his political superiors. This included Jean Pelletier, the Chief of Staff for then Prime Minister Jean Chrétien, and Alfonsio Gagliano, then Minister of Public Works and Government Services Canada, which was the ministry responsible for the Sponsorship Program.

Mr. Guité testified that the Sponsorship Program was completely politically driven and that it was structured in order to reward persons and advertising firms that were friendly to the Liberal Party of Canada and had participated in Liberal campaigns in Quebec. Bidding and contracting rules for sponsorships were loosely defined in order to give members of the governing party the flexibility to choose the advertising firms they preferred to hire. Mr. Guité testified that Mr. Pelletier and Minister Gagliano made use of these loose rules in order to steer contracts to Liberal-friendly advertising firms. In their testimony to the Gomery Commission, both Mr. Pelletier and Mr. Gagliano denied allegations that they manipulated sponsorship contracts in order to reward advertising firms associated with the Liberal Party.

In his testimony, Mr. Guité also claimed he had not participated in, nor had any knowledge of, any kickback scheme between Mr. Corriveau and several advertising firms to funnel money into the Quebec-wing of the Liberal Party of Canada.

Prime Minister Jean Chrétien

The testimony of former Prime Minister Chrétien was important for many reasons. He had been in power during the period in which the Sponsorship Program had been created and operated. One of the mandates of the Commission was to investigate whether there had been political influence in the operation of the Program and whether any elected officials had personally benefited. As such, the Commission was highly interested in the role of the former Prime Minister in the awarding of sponsorships.

Furthermore, in the period leading up to and following his testimony, Mr. Chrétien had taken public issue with the Commission and several of its senior officials, most notably its Commissioner, Justice John Gomery. The Prime Minister alleged that Justice Gomery was biased against him and applied to have the Commissioner removed from his post. These allegations were due, in large part, to comments Commissioner Gomery made to the media, in which he suggested that personalized golf balls bearing the name of the former Prime Minister, which had been paid for by the Sponsorship Program, were “small town cheap.” Prime Minister Chrétien also alleged that the Commission’s chief council, Bernard Roy, was biased because of his previous position as Chief of Staff to former Conservative Prime Minister Brian Mulroney. Ultimately, neither Gomery nor Roy were removed from the Commission.

At the Gomery Commission, the former Prime Minister revealed that his office generally handled issues relating to national unity, which included the Sponsorship Program. Mr. Chrétien, testified, however, that he had little direct involvement in the day-to-day operation of the Program, instead leaving such decisions to his subordinates; he stated, unequivocally, that he had no knowledge of any misdoings or mismanagement.

Prime Minister Paul Martin

In addition to examining former Prime Minister Chrétien, the Commission also heard testimony from Paul Martin, Prime Minister at the time of the Commission’s investigations. The participation of Prime Minister Martin in the Commission proceedings was a first in the history of public inquiries in Canada; until that time, no sitting Prime Minister had ever testified before a public inquiry. This is due, in large part, to the rule of Cabinet Privilege, in which sitting members of the federal cabinet, including the Prime Minister, have the right to refuse to give testimony. Prime Minister Martin and his Cabinet, however, waived this right, agreeing to be examined in public before the Commission.

As was the case with former Prime Minister Chrétien, there was considerable interest on the part of the Commission in Prime Minister Martin’s role in the Sponsorship Program. During the period in question, Mr. Martin had been the Minister of Finance and the senior elected official responsible for overseeing government spending. At the Gomery Commission, however, Martin testified that the Finance Minister’s role was limited to the large financial picture of the country. He also testified that Mr. Chrétien almost exclusively handled issues relating to national unity, which included the Sponsorship Program. As such, Prime Minister Martin asserted that he played no role in the operation of the Sponsorship Program, nor was he aware of any instances of misdoing or mismanagement.

Commission’s First Report: Assigning Responsibility

The Commission’s initial findings on what happened and who was responsible

In its first report, released in November 2005, the Gomery Commission examined what happened in the Sponsorship Scandal and who should be held responsible for any misdoings or mismanagement.

Findings of Fact in the Sponsorship Program

With respect to what actually happened in the Sponsorship Scandal, the Commission made the following findings:

Mismanagement of the Sponsorship Program

There was insufficient oversight at the very senior levels of the public service, which allowed managers of the Sponsorship Program to circumvent proper contracting procedures and reporting lines;

There existed a veil of secrecy surrounding the administration of the Sponsorship Program and an absence of transparency in the contracting process; and

There was a lack of clear objectives, criteria, and guidelines for the Sponsorship Program, which resulted in the sponsorships being used for purposes other than national unity or federal visibility.

Other Irregularities in the Program

There was clear evidence of political involvement in the administration of the Sponsorship Program;

Deliberate actions were taken by program managers to avoid compliance with federal legislation and policies, including the Canada Elections Act, the Lobbyists Registration Act, the Access to Information Act, and the Financial Administration Act, in addition to federal contracting policy;

There was a pattern of activity whereby a public servant in retirement, specifically, Charles Guité, did extensive business with former recipients of Sponsorship Program contracts; and

There existed a “culture of entitlement” among political officials and bureaucrats involved with the Sponsorship Program, including the receipt of monetary and non-monetary benefits.

Misdoings by Private Advertising Firms

There was gross overcharging by communications agencies for commissions, hours worked, and goods and services provided.

Kickbacks Involving the Liberal Party of Canada

There existed a complex web of financial transactions among Public Works and Government Services Canada (PWGSC), Crown Corporations, and communication agencies, involving kickbacks and illegal contributions to the Liberal Party of Canada within the Sponsorship Program;

Five communication agencies that received large sponsorship contracts regularly channeled money, via legitimate donations or unrecorded cash gifts, to political fundraising activities in Quebec, with the expectation of receiving lucrative government contracts; and

Certain communication agencies also carried on their payrolls individuals who were, in effect, working on Liberal Party matters.

Responsibility for the Sponsorship Scandal

The Commission went further, identifying the individuals it believed to be responsible for the Sponsorship Scandal. It is important to remember that the Commission’s report is not the same as the judgement of a court of law. As such, its conclusions and criticisms do not establish legal responsibility, either in criminal or civil terms.

Responsibility of Messrs. Chrétien &Pelletier

The Gomery Commission concluded that former Prime Minister Jean Chrétien, and his Chief of Staff Jean Pelletier, should be held responsible for the mismanagement of the Sponsorship Program. The Commission suggested that Mr. Pelletier, as the political overseer of the Sponsorship Program, should have been cognizant of the fact that the lack of guidelines for awarding sponsorships, in addition to the decision to use private advertising firms to administer them, was an open invitation to unscrupulous persons to manipulate the process for personal gain. With regard to Mr. Chrétien, the Commission concluded that the former Prime Minister should be assigned some responsibility for making the initial decision to run the Sponsorship Program through his own office, instead of within the normal bureaucratic structures. Moreover, as Mr. Pelletier was the Chief of Staff to the Prime Minister at the time, the Commission believed that Mr. Chrétien should be accountable for the poor decisions of his subordinate.

The Commission, however, found that neither Mr. Chrétien nor Mr. Pelletier could be held responsible for the kickback scheme involving Jacques Corriveau and the Quebec-wing of the Liberal Party of Canada. There was no evidence that either man was directly or indirectly involved in the kickback scheme.

Responsibility of Mr. Gagliano

The Commission also assigned responsibility for the Sponsorship Scandal to Mr. Gagliano, who was the Minister of Public Works and Government Services Canada (PWGSC), and the minister responsible for the Sponsorship Program. The Commission concluded that Mr. Gagliano continued the irregular manner of awarding sponsorships that had been initiated by Mr. Pelletier in the early stages of the Sponsorship Program. This included the absence of clear guidelines and criteria for providing sponsorships, bypassing normal bureaucratic structures of oversight, and a reliance on private advertising firms to manage sponsorships. In addition, the Commission found that Mr. Gagliano became directly involved in the decisions to award sponsorships for partisan purposes, which often had little to do with considerations of national unity.

Just as the Commission held former Prime Minister Chrétien accountable for the actions of his subordinate, it held that Mr. Gagliano must accept responsibility for the actions and decisions of persons under his direction, in particular, Pierre Tremblay, who was Mr. Gagliano’s Executive Assistant, and who later became director of the Sponsorship Program.

Finally, the Commission concluded that Mr. Gagliano must accept some of the blame for tolerating the improper methods employed to finance the activities of the Quebec-wing of the Liberal Party of Canada while he served as Prime Minister Chrétien’s Quebec lieutenant in Cabinet.

Responsibility of Other Ministers (including Paul Martin)

The Commission deemed that no responsibility or blame should be assigned to any of the other ministers of Prime Minister Chrétien’s Cabinet, including Paul Martin, then Finance Minister. The Commission concluded that these ministers were not informed of the initiatives being authorized under the Sponsorship Program. It also concluded that Martin should be exonerated from any blame for carelessness or misconduct given that his role as Finance Minister did not involve him in the supervision of spending, either by the Prime Minister’s Office or Public Works and Government Services Canada.

Responsibility of the Deputy Minister of PWGSC

The Commission found that the Deputy Minister of Public Works and Government Services Canada, Ranald Quail, should take some blame for the Sponsorship Scandal. Mr. Quail had been aware that Mr. Guité was meeting with the Prime Minister’s Office, and later with Mr. Gagliano, in which decisions were being made about the administration of a program for which he, as Deputy Minister, was responsible. The Commission concluded that Mr. Quail should have been more proactive in informing himself about the operation of the Sponsorship Program, and in calling Mr. Guité to account for his deficient administration of said Program.

Responsibility of the Quebec-wing of the Liberal Party of Canada

The Commission found that the Quebec-wing of the Liberal Party of Canada, as an institution, could not escape blame for the misconduct of its officers or representatives involved in the kickback scheme. Two successive Executive Directors were directly involved in illegal campaign financing. In addition, the Commission found that many Party workers accepted cash payment for their services when they should have known that such payments were illegal under the Canada Elections Act. In particular, the Commission singled out Michel Béliveau, Marc-Yvan Côté, Benoît Corbeil, and Joseph Morselli.

Responsibility of the Communications/Advertising Agencies

Finally, the Commission concluded that five advertising companies that participated in the Sponsorship Program should take blame for systematic over-billing, failure to fulfill obligations, charging for work not performed, conflicts of interest, assigning work to subcontractors when it was not necessary and without competitive bids, and other dubious contracting practices. The Commission, however, did note that this widespread profiteering was aided by the fact that the government agencies responsible for the Sponsorship Program did not properly administer the sponsorships.

The Commission also found that the advertising companies should be held responsible for their participation in the kickback scheme involving the Quebec-wing of the Liberal Party of Canada. It determined there existed, at the very least, an implicit link between contributions to the Party by the advertising firms and an expectation that government contracts would be awarded.

Commission’s Second Report: Restoring Accountability

Commission’s recommendations for governmental reform

In its second report, the Commission provided recommendations for ensuring that incidents such as the Sponsorship Scandal do not happen again. A central theme for the Commission was the absence of strong, responsible government in Canadian democracy, and the need to rebalance power in Parliament between the Prime Minister and Cabinet, and elected Members of Parliament (MPs) and Parliamentary Committees.

Problems in Responsible Government

A central conclusion of the Commission was that the Sponsorship Scandal indicated a deeper problem in Canadian democracy, specifically, a breakdown of responsiblegovernment. Before turning to the Commission’s specific concerns, it is useful to make a few comments on the notion of responsible government in Canada.

What we generally call the “government” is primarily, in fact, the Prime Minister and his/her Cabinet. This would include, for example, the Minister of Finance, the Minister of Foreign Affairs, the Minister of Health, and so forth. The Prime Minister and Cabinet are tasked with the job of making the big decisions of government pertaining to matters such as levels of taxation and government spending, what services and programs the government will provide, etc. In making these decisions, the government (understood as the Prime Minister and Cabinet) is not directly responsible to the Canadian people. It is actually responsible to the peoples’ elected representatives, or, more precisely, the Members of Parliament (MPs), who are elected by the people. The government can only hold power so long as it has the support of the majority of MPs in the House of Commons. When they lose this support, the government is defeated and must resign.

In the Canadian democratic system, then, responsible government requires MPs in the House of Commons to have the capacity to review government decisions and, when necessary, hold the Prime Minister and Cabinet responsible for those decisions. The Gomery Commission concluded, however, that this democratic process had failed in the case of the Sponsorship Scandal. Of particular concern to the Commission was a severe imbalance of power between the government and individual MPs — an imbalance which resulted in a parliamentary system in which MPs are typically unable to gain the information about the government they need so that they may effectively hold the Prime Minister and Cabinet democratically responsible.

To address this issue, the Commission concluded that a rebalancing of power in Parliament is essential. The Commission suggested this would include limiting the power of the Prime Minister and Cabinet, while, at the same time, increasing the power of individual MPs. The Commission also made several recommendations to increase general transparency and accountability in the operation of government.

Recommendations Regarding the Prime Minister & Cabinet

The Commission made several recommendations to limit the powers of the Prime Minister and his/her Cabinet:

Curb the power of the Prime Minister to manage secretive contingency funds, such as the Unity Reserve, in the case of the Sponsorship Program. Instead, it deemed that such special reserves should be managed by a central agency experienced in administrative procedures, such as the Treasury Board or the Department of Finance.

End the power of the Prime Minister and Cabinet to appoint senior bureaucrats, such as Deputy Ministers. Instead, the Commission suggested that such positions should be filled through independent and competitive processes in which personnel are hired on the basis of their professional qualifications, instead of their relationship to the political party or leader in power.

Disallow partisan political staff, such as the chiefs-of-staff and executive assistants to ministers, from giving direction to public servants. Moreover, the Commission suggested that Cabinet Ministers should be held fully responsible and accountable for the actions of their political staff members.

Recommendations Regarding Parliamentary Committees

In addition to recommending limits on the powers of the Prime Minister and Cabinet, the Commission also advocated strengthening the power of MPs in the House of Commons. Greater support for Parliamentary Committees was the Commission’s central recommendation in this regard. Parliamentary Committees are working groups of MPs that review government decisions in key areas of public policy, such as government finances, health care and social services, justice, foreign relations, and so forth.

When functioning properly, Parliamentary Committees can be an important means for MPs in the House of Commons to gain information about government decisions and actions, as well as an opportunity for MPs to question the government about the appropriateness of its decisions. According to the Gomery Commission, however, Parliamentary Committees usually lack the resources they need to fully perform this function. As such, a key Commission recommendation was to increase funding for all committees and, in particular, the Public Accounts Committee (which is responsible for reviewing government administration and accounting practices).

Other Recommendations of the Commission

The Commission also made several recommendations regarding general government transparency and accountability, the role of lobbyists, and future sponsorship activities:

Adopt legislation requiring public servants to document decisions and recommendations, and make it an offence, either if they failed to take such action, or should they destroy documentation recording government decisions and/or the advice and deliberations leading up to said decisions.

In order to clear up the confusion over the respective responsibilities and accountabilities of Ministers and public servants, the government should modify its policies and publications to explicitly acknowledge and declare that Deputy Ministers and senior public servants who have statutory responsibility are accountable, in their own right, for their statutory and delegated responsibilities.

The Office of the Registrar of Lobbyists should be provided with sufficient resources to enable it to publicize and enforce the requirements of the Lobbyists Registration Act, including investigation and prosecution by its own personnel. The Registrar of Lobbyists should report directly to Parliament on matters concerning the application and enforcement of this Act.

All future government sponsorship activities should be informed by clear objectives, and should operate in a manner that is transparent and fair, and free from political and partisan interference. Regular evaluations and audits should be held to ensure program objectives and criteria are being met, and that the government is getting value for its money.